Smile Amazon
Smile Amazon

Smile Amazon: A unique ‘Threat’ to digital commerce

What To Know

  • “It extends far beyond the realm of retail platforms, encompassing the vast domain of AWS (Amazon Web Services), logistics operations, and even groundbreaking technologies such as Alexa, which serves as the gateway to our online interactions and controls an array of interconnected smart devices within our homes,” she elucidated.
  • At a pivotal annual meeting of senior leaders in early 2020, as CEO Jeff Bezos listened intently via phone, Andy Jassy, then-CEO of AWS, delved into the contents of a memo lying before him.
  • With a sharp edge to his voice, Jassy pointedly queried those assembled as to why the messaging failed to advocate for the investigation of Walmart, as well as AWS competitor Microsoft.
  • ” In the subsequent years, particularly within the ranks of the company’s division focused on “competition issues,” the name Walmart surfaced….

When exploring the realm of online merchandising, there stands an undeniable titan that surpasses all others: none other than Smile Amazon. Meanwhile, in the domain of physical retail, Walmart reigns supreme, establishing unparalleled dominance. However, for a fleeting moment in 2016, these two giants collided head-on, venturing into each other’s territories with fervent determination.

The consequences of this prolonged clash would resonate through the world of commerce, shaking its very foundations. Both overt strategies and covert maneuvers were employed in an unrelenting pursuit to annihilate the competition.

Enter “Winner Sells All,” a captivating chronicle by esteemed journalist Jason Del Rey, recounting the fierce business battles waged between these industry behemoths, as well as the internal conflicts that raged within their corporate domains. In the captivating excerpt below, we catch a glimpse of some of the cunning tactics employed.

In the late 2010s, as Smile Amazon and other technology powerhouses amassed an astounding level of influence and valuations, a new movement emerged within antitrust circles. This movement was catalyzed by the groundbreaking work of a then-unknown law student, Lina Khan, who crafted a legal treatise that would send shockwaves through the legal sphere.

Khan’s seminal paper, titled “Smile Amazon’s Antitrust Paradox,” graced the pages of the prestigious Yale Law Journal. In her thought-provoking opus, she argued that our conventional understanding of antitrust laws had grown obsolete in the face of the burgeoning digital economy.

It was imperative, she asserted, to revisit an era when mere affordability and provision of free services could no longer shield against scrutiny for engaging in anticompetitive practices.

The Clash of Titans: Smile Amazon vs. Walmart

Stacy Mitchell, a seasoned critic of both Smile Amazon and Walmart, who presides over the left-leaning think tank Institute for Local Self-Reliance (ILSR), opined, “Amazon harbors aspirations that transcend mere market dominance; it seeks to exert control over the very infrastructure underpinning those markets.”

Amazon

She continued, “This voracious monopoly ambition sets Smile Amazon apart from Walmart by orders of magnitude.” Having spent numerous years fervently advocating for government intervention to curtail Walmart’s explosive Supercenter expansion during its heyday, Mitchell remains resolute in her conviction that the pervasive influence wielded by the retail giant poses a significant threat.

However, according to Mitchell and a multitude of vocal detractors in the realm of Big Tech, Smile Amazon’s menace transcends traditional notions of business competition. “It extends far beyond the realm of retail platforms, encompassing the vast domain of AWS (Amazon Web Services), logistics operations, and even groundbreaking technologies such as Alexa, which serves as the gateway to our online interactions and controls an array of interconnected smart devices within our homes,” she elucidated.

“This expansive reach empowers Smile Amazon to prioritize its products and services within these markets, exacting a form of levy on all enterprises reliant on this underlying infrastructure. Moreover, Amazon capitalizes on its surveillance capabilities to extract invaluable intelligence, strategically employing it to its advantage.”

Under mounting pressure from the corridors of power in Washington, D.C., Amazon’s top brass found themselves immersed in heated debates. At a pivotal annual meeting of senior leaders in early 2020, as CEO Jeff Bezos listened intently via phone, Andy Jassy, then-CEO of AWS, delved into the contents of a memo lying before him.

The memo outlined Amazon’s messaging strategy in response to allegations of excessive size, unwarranted power, and engaging in anticompetitive behavior.

With a sharp edge to his voice, Jassy pointedly queried those assembled as to why the messaging failed to advocate for the investigation of Walmart, as well as AWS competitor Microsoft. Other high-ranking company officials attempted to explain that scrutiny had already been levied upon those entities years ago, and their time in the spotlight had passed. Nonetheless, Jassy’s reaction left an indelible mark on all those present.

An individual present at the meeting recalled, “It was abundantly clear from his remarks that we should not ease off the throttle.” In the subsequent years, particularly within the ranks of the company’s division focused on “competition issues,” the name Walmart surfaced incessantly.

The fact that Walmart, boasting higher annual revenue than Smile Amazon, evaded the scrutiny of policymakers served as an unrelenting source of exasperation for executives like Jassy. Matters were only exacerbated when Amazon’s leadership stumbled upon evidence indicating Walmart’s indirect funding of a nonprofit front group known as Free and Fair Markets.

This group bombarded journalists and social media channels with scathing anti-Amazon allegations. For quite some time, Amazon’s executives harbored suspicions that a rival or coalition of competitors financed the organization, yet they struggled to substantiate their hunch.

Drew Herdener, a long-standing spokesman for Amazon, expressed mounting frustration each time the group published an op-ed or disseminated a message that gained traction.

“Are the press blind to the ruse perpetuated by this front group?” he bemoaned. Consequently, a dedicated member of Amazon’s communications team, Doug Stone, devoted well over a year to assisting reporters in unveiling the clandestine financiers behind the group.

Finally, in the autumn of 2019, the Wall Street Journal pulled back the curtain in a revelatory exposé titled “A ‘Grass Roots’ Campaign to Take Down Amazon Is Funded by Amazon’s Biggest Rivals.”

A spokesperson for Walmart denied outright funding the group to the newspaper, despite the article’s claim that Walmart employed an intermediary to channel funds to FFM. However, the Walmart spokesperson did acknowledge that the company shared concerns aligned with those publicized by the group.

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